What will be the real effect on profit if order is accepted

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Question - Expresso Metal Works received an offer from a big-box retail company to purchase 3,660 metal outdoor tables for $260 each. Espresso Metal Works accountants determine that the following costs apply to the tables:

Direct Material $163

Direct Labor $61

Manufacturing overhead $86

Total $310

Of the $86 overhead, $17 is variable and $69 relates to fixed costs. The $69 of fixed overhead is allocated as $1.32 per direct labor dollar. What will be the real effect on profit if the order is accepted?

Reference no: EM133040979

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